Why am I just hearing about the Employee Retention Credit?
How do I qualify for the retroactive 2020 credit?
How do I qualify for the 2021 ERC credit?
Will this affect my PPP Loan forgiveness?
No, the PPP Loan amount is deducted from the ERC calculations and will be kept separate as required.
How is the ERC calculated retroactively for 2020?
How is the ERC calculated for 2021?
Why am I getting this credit?
Will we need to pay taxes on this refund?
How will I receive the refund?
When can I expect to receive the refund?
When does Payroll Vault collect their fee?
Is this legitimate legislation?
Was the ERC extended for all quarters in 2021?
For 2021, the maximum credit is 70% of wages up to $10,000 for a maximum credit of $7,000 per employee per quarter for 1st -3rd quarters of 2021 – so a total maximum credit of $21,000 per employee for 2021.
If you were a new business or started a new trade in an existing business after February 15th 2020, you could be eligible for the Recovery Start-up provision of the ERC. The maximum credit is capped at $50,000 for 3rd and 4th quarters of 2021.
I am a new business who received both rounds of PPP loans. Can I still take advantage of the ERC?
Yes, but you will need to subtract the PPP funds that were used for wages for the same time frame you are calculating your ERC. Payroll Vault can help with these complicated calculations to make sure you can maximize your credits while staying in compliance with your PPP loan forgiveness.
I started my business in 2020, but didn’t close or have reduced revenue. What credits are available to me?
As part of the American Rescue Plan Act (ARPA), new businesses who started after February 15th 2020 are able to take advantage of the Employee Retention Credit (ERC) too. The wage and credit calculations will be the same, but the cap for the credit is $50,000 for the 3rd and 4th quarters of 2021.